Phillips 66 (PSX) is a Top-Ranked Value Stock: Should You Buy?

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

Phillips 66 (PSX)

Based in Houston, TX, Phillips 66's operations incorporate refining, midstream, marketing and specialties, and chemicals. The company, in its current form, came into existence following the 2012 spin-off of ConocoPhillips' downstream business into a separate, independent and publicly-traded entity. The company’s operations include processing, transportation, storing and marketing fuels and products all over the world. Phillips 66 Partners, the company's master limited partnership, is an important asset in the portfolio. The company operates through the four business segments, namely, Midstream, Chemicals, Refining, and Marketing and Specialties.

PSX sits at a Zacks Rank #2 (Buy), holds a Value Style Score of A, and has a VGM Score of A. Compared to the Oil and Gas - Refining and Marketing industry's P/E of 5.7X, shares of Phillips 66 are trading at a forward P/E of 5.4X. PSX also has a PEG Ratio of 0.4, a Price/Cash Flow ratio of 9.3X, and a Price/Sales ratio of 0.3X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $2.35 to $16.22 per share. PSX has an average earnings surprise of 36.4%.

PSX should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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